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Self-Assessment Fraud Resilience Tool

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The Charity Commission is encouraging larger charities to make use of a free tool aimed at helping them assess their resilience against fraud.

The Self-Assessment Fraud Resilience (SAFR) Tool, designed by accounting firm PKF Littlejohn and based on large databases managed by it and the Centre for Counter Fraud Studies at University of Portsmouth, is based around 29 questions and allows an organisation to establish how well it is protected against fraud, including:

How well it understands the nature and cost of fraud;

Whether it has an effective strategy to address the problem;

Whether it has a counter-fraud structure which helps it implement its strategy;

Whether it takes a range of pre-emptive and reactive action to counter fraud; and

The extent to which fraud is addressed and managed like any other business issue.

The commission has circulated the SAFR tool to all registered charities with an annual income of over £1million, of which there are around 6,700, and encourages them to complete it before the end of March.

Charities completing the self-assessment will receive instant results, giving them a fraud resilience rating out of a maximum 50 score, and telling them how well they have scored relatively against the hundreds of organisations across the charity and other sectors who have already measured their fraud resilience. Charities will also receive an estimate of how much they lose to fraud each year.

The regulator stresses that charities’ responses will be strictly confidential. The commission will have no access to individual responses but will see an overview of outcomes, which will allow it to identify areas of particular strength or weakness and thus help it focus and improve its guidance for charities.

There is no agreement over the extent of fraud affecting charities, but the commission states that there are no grounds for believing that charities are any less vulnerable to fraud than other types of organisations.

The Charity Finance Group has developed a guide to help charities prevent and disrupt fraud. The guide, entitled Charity Fraud – a guide for trustees and charity managers, was developed in collaboration with the commission and other partners.